What are digital currencies?


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Digital currencies are a form of digital money that allows you to conduct transactions online, and unlike regular currencies, they are only found online and are not supported or controlled by banks and governments, nor are they decentralized and run by a network of computers instead of one person or company, The money you own is controlled by a digital wallet, saved cloud or offline on a computer, and it can be sent to someone via a computer or mobile device such as a smartphone. Each transaction is recorded in the so-called “blockchain”, which is available to the public For all currency holders.

Their advantages:

Ease of access – Cryptocurrencies are readily available to the general public, and almost anyone can benefit from, they are also a decentralized process and easy for investors from all parts of the world to access, and you can find many projects that try to raise money through cryptocurrencies, and can be almost Anyone who can make online money transfers can become part of these projects.

Fast and easy payments – making payments using digital currencies is very easy, you can do this in a few seconds, it is also very fast because you do not need to enter any details, you do not even need to enter credit/withdrawal card details, and all you need is a wallet address The person or institution you wish to pay to, the amount will be transferred to the recipient within a few seconds to a few minutes depending on the currency, and the ease of transfer and low transaction fees make crypto highly desirable.

Quick adjustments – you don’t need to wait a few days to receive money for your business with digital currencies, and since digital currencies rely on blockchain technology, which removes delays, payment of fees, and hosting for third-party approval that may exist, and for traditional businesses, often There are no breakdowns and obstacles due to the number of intermediaries that you have to bypass, but with transactions in digital currencies, there is a quick settlement because the nature of the peer-to-peer in the network structure removes the mediator, and currency contracts are designed to remove the obstacles that have become distinctive Traditional, working settlements immediately and can be completed in a fraction of the time and expenses that were consumed by traditional transfers.

Low fees – we have all been exposed to this, and it can sometimes be painful when reviewing your monthly account data from your bank, and you are often shocked by the number of fees reached, and the transfer of funds by using any other form via the Internet or a banking portal Expensive because it imposes large transaction fees, and credit card processing companies charge exorbitant fees, but it is not so with a digital currency, because the costs are nothing or negligible, and by credit or debit cards, the seller pays the fees, but in relation to the currencies The digital buyer is a Pay a small fee, and the problem with these fees they are piling up often and can accumulate quickly, but digital transactions for a small fee and very cost the only buyer.

Privacy – You do not need to share your identity, location or transaction details between you and the beneficiary, and there is no information required to share it with the government and the bank regarding the deal, it is really decentralized.

High Security – All your transactions will be safe as they use the NSA encryption algorithm, and it is impossible for anyone other than the wallet owner to pay any amount of the wallet unless it is compromised, and there are many ways to protect yourself from it.

Staying anonymous – some currencies can help you remain anonymous but contrary to popular belief, not all of them can, and in Bitcoin, they have a pseudonym which means that people will not quite know who you are on the blockchain but can get some information from them.

Identity Theft – Nobody can steal your personal information from merchants, ensuring the privacy of your sensitive data, and by creating an anonymous “proxy ID”, you can make sure that nobody knows anything about you, and among the benefits that come from using digital currencies is protection Your identity on the Internet, while using the old traditional currencies method requires providing your credit card information to a dealer who gets access to all the details through the “withdrawal” rule where the card withdraws your details before debiting from your account, while with digital currency transactions, it is almost It is impossible to find your private key or Hack it unless you are not smart about it, and your transaction history can be seen only if someone has your public key, and cryptocurrency transactions are also unique each time you do even when the parties are similar, and the exchange of information uses the “payment base” This means that you decide the information you want to send to the recipient, in contrast to the “withdrawal rule” for traditional exchange systems.

No refund – Once the amount is paid off, you cannot refund the sums paid, this largely exhausts the chances of fraud, and once the transfer is complete it cannot be reversed, and no one can file a refund request on credit cards, while they have negative aspects to them but they can Be a benefit, too.

Without a third party – you are the master of your money; you can keep it in your wallet and use it as per your desires, no third party is involved like the bank you need to trust.

Ease of access – given the medium in which the digital currency – the Internet – exists, there is greater access to what is prevalent in traditional financial systems, and with digital currency, anyone can access it, and you do not need a commercial activity account or a withdrawal program, and what is required is a mobile phone The Internet is getting started, and for developing countries where there is a huge gap between those who have access to traditional exchange systems and those who do not, the digital currency opens up a new world for everyone to access and benefit from.

How do you store digital currencies?

The digital currency wallet is a computer program that stores private and public keys and interacts with different blocks to enable users to send and receive digital currencies and monitor their balance, and if you want to use Bitcoin or any other currency, you will need to obtain a digital wallet, millions of people use the currency wallets Digital, but there is a big misunderstanding about how it works. Unlike traditional “pocket” wallets, digital wallets do not store currencies. In fact, currencies are not stored in any one place or anywhere and in any physical form, and everything that exists It is records of transactions A weight on the blockchain, and the digital currency wallets are programs that store your public and private keys and act as an intermediary with the various blocks so that users can monitor their balance and send money and do other operations, and when someone sends you bitcoins or any other type of digital currency, it is basically a signature On the ownership of the coins to your wallet address, and in order to be able to spend these currencies and unlock the money, the private key stored in your wallet must match the public address to which the coin is assigned, and in the event that the public and private keys match, the balance in your digital wallet will increase, It will decrease at the transmitter accordingly,

There is no real exchange of real coins, and the deal can be indicated only through the transaction log on the blockchain and a change in the balance in your digital currency wallet.

Legitimacy of digital currencies

The legal status of bitcoin varies greatly from one country to another and is still not specified or changed in many of them, and while the majority of countries do not make the use of Bitcoin illegal, its status as a currency (or commodity) varies, with different organizational implications, and while some countries have explicitly allowed their use and trade, others have banned or restricted them, and likewise, various government agencies, departments, and courts have classified them in different forms, and while this article provides the legal status of bitcoin, the regulations and decisions that apply to this digital currency may extend to similar systems Also.

What are the common digital currencies?

A brief explanation of the three largest digital currencies according to their size:

Bitcoin: Bitcoin uses peer-to-peer technology to work without central authority or banks, transactions are managed and bitcoin issuance is collectively by the network, bitcoin is open source, and its design is available for the year, no one owns or controls Bitcoin and everyone can participate, and through many of its features Unique, Bitcoin allows exciting uses that cannot be covered by any previous payment system.

Ethereum: It is a decentralized platform that manages smart contracts: applications that work exactly as they were programmed without any possibility of crashes, censorship, fraud or third-party interference, and these applications operate on a custom blockchain, which is a very strong global joint infrastructure that can move value and represent ownership, and this It enables developers to create markets, store debt records or promises, or transfer funds according to instructions given in the past (such as a will or futures contract) and many other things that have not yet been invented, all without broker or counterparty risk, and the project is started from During an earlier presentation in August 2014 by fans worldwide and developed by Ethereum, a Swiss non-profit organization, with contributions from great minds around the world.

Ripple: Ripple provides a single, frictionless experience of sending money globally using the power of the blockchain, by joining Ripple’s growing global network, financial institutions can process their customer payments anywhere in the world instantly, reliably and cost-effectively, and banks and payment providers can use the XRP digital asset to further reduce their costs and reach new markets

How does BTC work?

Bitcoin is nothing more than a mobile application or computer program that provides a personal wallet of bitcoin and allows the user to send and receive bitcoin with them, from the user’s point of view, and this is how bitcoin works for most users, while behind the scenes, the bitcoin network shares a common data record called “blockchain This data log contains every transaction processed, allowing the user’s computer to validate each transaction, and the health of each transaction is protected by digital signatures corresponding to the transmission addresses, allowing all users to have full control over Bitcoin AD transmission Their Bitcoin addresses, and in addition, anyone can process transactions using the computing power of specialized devices and earn a bonus from Bitcoin for this service, this is often called “mining”, and to learn more about Bitcoin, you can refer to the page assigned to it and the original paper.

My general expectations for the digital market

The cryptocurrency market may face an optimistic outlook in 2020, and it is likely to not be limit.

The case is only for bitcoin, as we often see that digital currencies are similar in price behaviour

With Bitcoin, some market analysts expect:

The direction of the cryptocurrencies towards the bullish path, and thus this means increased demand for digital currencies and confidence in this area.

Governments and central banks may work to embrace this field and recognize it further, due to the less aggressive tone rejecting it compared to 2019.

Some other cryptocurrencies may make a lot of appearing and competing to be in the market and among users

2020 is expected to be the most prominent year for cryptocurrency.

Eric Schmidt, Google CEO said:“[Bitcoin] is a major breakthrough in the crypto world … The ability to create something that is not reproducible in the digital world has tremendous value … and a lot of people will create businesses based on that.

Bill Gates, co-founder of Microsoft, investor and philanthropist: “Bitcoin exists because it shows how cheap it can be. And Bitcoin is better than currency in that it doesn’t have to be physically in the same place, and of course, for large transactions, the regular currency can become very unfavourable.

So digital currency I hope to be the only way to buy and sell in the future it is the future.

By community member Mohand Saleh